6 Best Fidelity Mutual Funds: Which One Is Right for You?

As part of offering financial services to millions of investors, Fidelity Investments has a large selection of mutual funds. Mutual funds offer investors of any level the opportunity to easily achieve instant diversification within their portfolios. Whether you’re building a complete portfolio or adding on to an existing one, the funds detailed here are some of the best long-term investments that Fidelity has to offer.

Fidelity Investments Funds

Fidelity Investments has a large selection of mutual funds, and sorting through them all can be time- consuming. Here are six of the best Fidelity mutual funds:

1. Fidelity 500 Index Fund (FUSEX)

The S&P 500 — formerly called Standard & Poor’s 500 index — is a widely followed stock market index that covers 500 large U.S. companies over a broad range of industries and is frequently used as a benchmark for other mutual funds and investment products. The Fidelity 500 Index Fund is one of several Fidelity index funds which is designed to track the S&P 500, providing a solid way for investors to get instant, low-cost exposure to large size American companies. The fund makes a great central investment for any investment portfolio but provides no exposure to smaller-sized companies or international companies.

2. Fidelity Total Market Index Fund (FSTMX)

Another of the best Fidelity index funds, the Total Market Index Fund is for investors who want broad exposure to companies of all sizes in the U.S. Although this fund holds no international investments, it seeks to track the performance of the Dow Jones U.S. Total Stock Market Index. Investors in this fund get not only the exposure to large companies that the Fidelity 500 Index Fund provides but exposure to small and midsized companies as well.

Overall, this pick is best for investors seeking to get broad market exposure in a single fund — not for investors who like to fine tune their own asset allocations.

3. Fidelity Contrafund (FCNTX)

Where the Fidelity index funds seek to mimic the performance of a stock index, Fidelity Contrafund beats its own path. The investment philosophy of this fund is to find companies with prospects that are brighter than reflected in their current stock price. By researching companies and buying them before the rest of the market realizes their potential, this growth fund seeks high capital returns for investors.

The fund is a great addition to the portfolio of an investor looking for higher growth in exchange for a bit more risk. But this fund offers no international exposure, and it’s a poor choice for conservative investors or those seeking income.

Minimum investment: $2,500

Expense ratio: 0.74%

4. Fidelity Select Technology Portfolio (FSPTX)

The Fidelity Select Technology Portfolio is a high-risk, high-return mutual fund that seeks investments in companies that have fast-growing or world-changing technologies, as well as the companies that will benefit from the adoption of those technologies. The fund provides investors a way to invest in companies like Apple, Tesla, and Facebook in a single mutual fund.

Concentrating investments in technology companies like this means high-volatility, however. As a result, this fund is only for investors with a high-risk tolerance or those who will offset this aggressive fund with more conservative investments — not conservative investors.

5. Fidelity Capital & Income Fund (FAGIX)

Capital gains aren’t the only reason to invest in mutual funds. The Fidelity Capital & Income Fund, which invests in both stocks and bonds, offers investors ongoing income, while still trying to capture price appreciation. Although this fund aims for income, it would be a mistake to consider it a conservative investment fund. The fund invests in all manner or bonds, including low-grade bonds and bonds of distressed companies. But for retirees looking for income or long-term investors with time to wait out any bumps, this fund generates solid yields.

Minimum investment: $2,500

Expense ratio: 0.73%

6. Fidelity Freedom Funds

For investors who don’t want to mess around with creating their own portfolio while saving for retirement, the Fidelity Freedom Funds offer a way to invest on autopilot. The Freedom Funds are a fund of funds, or mutual funds that invest in a combination of other mutual funds to build a self-contained portfolio in one investment.

The advantage of these funds is that they change their investment structure over time, so investments become more conservative the closer the target date comes. That makes these funds great for investors who don’t want to have to keep an eye on their investments — but not for micromanagers who want full control of their investing.

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